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My first article on Seeking Alpha was an article called Artificial Life Attractive Trade For The Booming iPhone Pad Market.

A lot has happened with the company since my first publication. Auditors come and go and accounting problems remain unresolved. KPMG resigned on March 30 and BDO resigned on June 27 this year.

The problem seems to be the substance of certain material transactions, accounting for recognition of revenues (including timing and actual receipt of cash) and valuation of intangible assets. In April I already mentioned that securitizing their receivables is a red flag. Acquiring equity stakes with non-cash assets (accounts receivables) raises questions. Selling receivables enables the company to collect cash sooner, but the firm collects less cash because they are sold at a discount.

Despite these issues Artificial Life is still alive and engaged new auditors, Parker Randall from Hong Kong The 10-K (FY 2010) and the 10-Q for the quarters ended March 31, 2011 and June 30, 2011 will be completed on or before August 15 according to the document. Let's hope Parker Randall doesn't resign before.

In my opinion one of the problems of this company is the CEO and Chairman Eberhard Schoneburg. Mr. Schoneburg is a well-known IT and mobile industry veteran. He is a prominent speaker at industry conferences worldwide and has written five lecture books and more than sixty research papers pertaining to computer viruses, neural networks, evolution strategies and genetic programming. Mr. Schoneburg holds a Master of Science degree in Mathematics from Freie Universität Berlin, Germany.

The CEO and Chairman is a Technician and a major shareholder without the knowledge or skills necessary to run a successful business. But as an owner of a business, he has to deal with hiring and managing employees, budgeting, taxes, payroll, administrative tasks.

An entrepreneur like Schoneburg has to do the work of envisioning the business.

Central to this approach is repeating: you are not your business. Even if you are the one who actually drills the teeth or performs the exam, you must view your business as your end product. You can be a Technician and not be the business. If you don't figure that out, you'll never be able to get free of the business, to retire or — and this is where it gets good — only work when you want to.

When you realize that your business is your product, you can step outside of it and reinvent it. And this holds true for any Technician, It all starts with a change in the way you think about your business; it starts with entrepreneurial thinking.

The Technician thinks: Time = Work = Money. I spend the time, I work hard and I earn money. To get more money, I work harder.

The Entrepreneur thinks: Time = Equity = Freedom. I spend the time, I build the equity of my business and I get free of the business. To get more freedom, I build more equity.

The Technician thinks: I do the work.

The Entrepreneur thinks: Someone else does the work.

The lesson here is that you don't have to give up the technical work if you have the knowledge to build a business that supports that technical work. You have to develop your business so that the systems run the business, and let people run the systems.

The CEO's job is to lead and a big part of leadership is deciding who does what job.

Despite all the issues and red flags Artificial Life has encountered it has to explain to investors why certain issues where not resolved, that's the only way to regain trust and faith in a promising business.

In my opinion the company has still value but how much it's hard to calculate right now. Games are still being downloaded (sold) and people are still being hired. Maybe you can apply for a job as a CEO in the future.

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would you buy here? day by day new lows? old profitable business in Q2 just down 95% on revenue?? that is very strange - would expect an slowing on the revenues because of existing contracts and still ongoing downloads???

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